The stock market in the USA closed with sharp price drops of about 1.9% amid investor fears of a recession. The Nasdaq index closed with a 1.9% decrease, and in the weekly summary fell by about 5%.
The Dow Jones index weakened by 1.7% and the S&P 500 index lost 1.8%.
The fears of a recession that would lead to a decrease in demand for oil caused its price to drop.
The price of crude oil today fell below 80 dollars per barrel for the first time since January of this year (before the outbreak of the war between Russia and Ukraine), thus concluding the fourth week of declines.
Oil drilling,
It is too early to determine whether the price of fuel will decrease as a result, and the official price will be published by the Ministry of Energy at the end of the month.
At the current price level of the price of oil, it can be assumed that the price of fuel is expected to decrease by about 4% in October, but on the other hand, the dollar strengthened against the shekel, which neutralizes part of the effect.
According to one of the sources, if there are no dramatic changes in the price of oil or the dollar exchange rate by the end of the month, the price of fuel may drop by about 20 shekels per liter from its current level of NIS 6.37.
The main reason for the declines in the US stock markets is the clear signaling by the US central bank that it is determined to gain control over the rising inflation in the US even at the cost of the world's largest economy going into recession. We will remind you that high interest rates make mortgage payments and loan repayments more expensive, and thus Reduces the disposable income and slows down the economic growth of the economy.
Wall Street declines // Photo: Reuters
This week the Federal Bank raised the interest rate by 0.75% for the third time in a row to a range of 3.25%-3%, and this, in accordance with most forecasts.
The Fed members' interest rate expectations for 2022 were also updated upwards, to 4.4% and for 2023, to 4.6%.
The dollar soared against the world's leading currencies and against the shekel.
Against the euro, the dollar strengthened on Friday by about 1.51% to a level of 0.97, and against the shekel, the dollar strengthened by 0.5% in the late trade between the banks to a level of 3.5020.
This week the central banks of Great Britain, Norway and South Africa also raised interest rates in the local economy.
In Israel, the next interest rate increase will be on October 3rd, and the expectation is that the Governor will raise the interest rate by 0.5%.
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